Impaired risk, an industry term that refers to life insurance on people with significant health issues, cancer, diabetes, heart disease and such, is an area that we have focused on for some time. While the masses and the giant internet agencies flock to the healthiest clients they can find in a feeding frenzy on the easily insured, some of us have found a niche that most agents would prefer to steer away from.
Because of the path we’ve chosen I often get solicitations from different large agencies to help handle our impaired risk shopping and administration. While I have used Special Risk Services out of Denver for as long as I can remember because they really are the best, like any other business we still get offers.
Most blow right through my desk and on to the trash can. One today caught my eye and because it was so bizarre I thought I would share it. This came from a series of six ideas about how to handle impaired risk cases, a lot of industry mumbo jumbo for the most part until you come to idea number six.
Number six has to do with what we should suggest if we find a client who truly is not insurable. It suggests, seriously, that you find a surrogate insurable person to take out insurance in your client’s place. So, you’re too sick to get insurance and therefore your beneficiary won’t get anything when you die, but you talk someone else into taking out insurance with, for instance, your wife as beneficiary, and when they die your wife finally gets the insurance you weren’t able to provide her.
So, I’m explaining this to my wife. “It’s like this Pam. I’m too sick to get the $1,000,000 of insurance we need to replace the income you will lose if I die, so we turn to my nephew who is healthy and get him to take out $1,000,000 with you as beneficiary. There is a downside though. He is younger and very healthy and will likely outlive me by 20 or 30 years. So, in order to make this work, my last act as a devoted husband will need to be to shoot my nephew so you can collect the money you need to get on with life.”
Bottom line. Good chuckle. The good news is that with proper preparation and shopping, very few cases are uninsurable. Call an independent agent to work on quotes for you today, but steer away from idea number six.